Memorandum of Understanding. Between. Minister of Finance. And. Chair, Financial Services Commission of Ontario & Chair, Financial Services Tribunal

Memorandum of Understanding Between Minister of Finance And Chair, Financial Services Commission of Ontario & Chair, Financial Services Tribunal And Chief Executive Officer, Financial Services Commission of Ontario & Superintendent of Financial Services

CONTENTS 1. Purpose... 4 2. Definitions... 4 3. Legal Authority and Mandate... 5 4. Agency Classification... 6 5. Guiding Principles... 6 6. Accountability Relationships... 7 6.1 Minister... 7 6.2 Chair... 7 6.3 Superintendent... 7 6.4 Commission... 7 6.5 Deputy Minister... 8 7. Conflict of Interest... 8 8. Roles and Responsibilities... 8 8.1 Minister... 8 8.2 Chair and Superintendent... 9 8.3 Chair... 10 8.4 Superintendent... 11 8.5 Commission... 13 8.6 Deputy Minister... 13 9. Reporting Requirements... 14 9.1 Business Plan... 15 9.2 Annual Report... 15 9.3 Annual Statement of Proposed Priorities... 15 9.4 Other Reports... 15 10. Communications... 15 11. Administrative Arrangements... 16 11.1 Applicable TB/MBC and Ministry Directives... 16 11.2 Administrative and Organizational Support Services... 16 11.3 Legal Services... 17 11.4 Freedom of Information and Protection of Privacy... 17 11.5 Delegation of Human Resources Management Authority Under the PSOA... 17 11.6. Records Management... 17 11.7 Client Service... 17 11.8 Information Technology (IT)... 18 12. Financial Arrangements... 18 12.1 Funding... 18 12.2 Financial Reports... 19 12.3 Taxation Status: Harmonized Sales Tax (HST)... 19 12.4 Acquisition of Goods, Consulting and Non-Consulting Services... 20 13. Audit and Review Arrangements... 20 14. Staffing and Appointments... 20 14.1 Staffing... 20 2

14.2 Appointments... 21 15. Liability Protection and Insurance... 21 15.1 Immunity... 21 15.2 Insurance... 21 16. Effective Date and Duration and Periodic Review of this MOU... 21 16.1 Effective date of MOU... 21 16.2 Periodic Reviews... 22 Signatures... 23 Appendix A: Related Statutes Appendix B: Summary of Reporting Requirements Appendix C: Public Communications Protocol Appendix D: Applicable TB/MBC Directives and Policies Appendix E: Administrative and Support Services Appendix F: PSC Delegation 3

1. Purpose a. The purpose of this Memorandum of Understanding (MOU) is to: i. Establish the accountability relationships between the Minister and the Commission and the Tribunal, through the Chair and the Superintendent. ii. Clarify the roles and responsibilities of the Minister, the Chair, the Superintendent, and the Deputy Minister. iii. Set out the expectations for the operational, administrative, financial, staffing, auditing and reporting arrangements between the Commission and the Tribunal, and the Ministry. b. This MOU should be read together with the Financial Services Commission of Ontario Act, 1997, S.O. 1997. This MOU does not affect, modify or limit the powers of the Commission or the Tribunal as set out in the Act, or interfere with the responsibilities of any of its parties as established by law. In case of a conflict between this MOU and any act or regulation, the act or regulation prevails. In this MOU 2. Definitions a. Act means the Financial Services Commission of Ontario Act, 1997, S.O. 1997, c.28 that established and governs the Commission, the Superintendent and the Tribunal b. Agencies means, for the purpose of this MOU, the Commission and the Tribunal c. AAD means the Treasury Board/Management Board of Cabinet Agencies & Appointments Directive d. appointee means the chair and the vice-chairs of the Commission and a member appointed to the Tribunal by the Lieutenant Governor in Council e. Chair means the chair of the Commission and the chair of the Tribunal f. Commission means the Financial Services Commission of Ontario as established under section 2 of the Act g. Deputy Minister means the deputy minister of the Ministry of Finance h. MBC means Management Board of Cabinet i. Minister means the minister of the Ministry of Finance j. Ministry means the Ministry of Finance k. PSOA means the Public Service of Ontario Act, 2006, S.O. 2006, c. 35, Sched. A. 4

l. regulated sectors means the sectors defined in the Act as follows, (a) all co-operative corporations to which the Co-operative Corporations Act applies; (b) all credit unions, caisses populaires and leagues to which the Credit Unions and Caisses Populaires Act, 1994 applies; (c) all persons engaged in the business of insurance and governed by the Insurance Act; (d) all holders of a service provider licence issued under Part VI (Automobile Insurance) of the Insurance Act; (e) all corporations registered under the Loan and Trust Corporations Act; (f) all mortgage brokerages, mortgage brokers, mortgage agents and mortgage administrators licensed under the Mortgage Brokerages, Lenders and Administrators Act, 2006, or; (g) all persons who establish or administer a pension plan within the meaning of the Pension Benefits Act and all employers or other persons on their behalf who are required to contribute to any such pension plan m. related statutes means the related statutes that confer powers and duties on the Commission, the Tribunal and the Superintendent, and as are listed in Appendix A to this MOU n. Superintendent means the Superintendent of Financial Services, who is also the chief executive officer of the Commission, as provided for in section 5 of the Act o. TB means Treasury Board p. Tribunal means the Financial Services Tribunal as established under section 6 of the Act 3. Legal Authority and Mandate a. The legal authority of the Commission, the Superintendent and the Tribunal is set out in the Act. b. The Commission, the Superintendent and the Tribunal also exercise powers and authority under the Act and the related statutes. c. The mandate of the Commission is to provide regulatory services that protect the public interest and enhance public confidence in the regulated sectors; to make recommendations to the Minister on matters affecting the regulated sectors; and to provide the resources necessary for the proper functioning of the Tribunal. d. The mandate of the Superintendent is to be responsible for the financial and administrative affairs of the Commission; to exercise the powers and duties conferred on or assigned to the Superintendent; to administer and enforce the Act and the related statutes; and to supervise generally the regulated sectors. 5

e. The Tribunal is an independent, adjudicative body composed of nine to fifteen members, including the Chair and two vice-chairs. The Tribunal has exclusive jurisdiction to exercise the powers conferred under the Act and related statutes that confer powers on or assign duties to the Tribunal. It also has exclusive jurisdiction to determine all questions of fact or law that arise in any proceeding before it. 4. Agency Classification a. The Commission is classified as a Regulatory Agency (with a governing board) under the AAD. Pursuant to Ontario Regulation 146/10 made under the PSOA, the Commission is prescribed as a Commission public body. b. The Tribunal is classified as a Regulatory Agency under the AAD. Pursuant to Ontario Regulation 146/10 made under the PSOA, the Tribunal is prescribed as a Commission public body. The parties agree to the following principles: 5. Guiding Principles a. The Minister acknowledges that the Commission, the Superintendent and the Tribunal exercise powers and perform duties in accordance with their respective mandates. b. The Minister acknowledges the need for the Superintendent and the Tribunal s adjudicative/regulatory decisions to be made, and be seen by the public to be made, independently and impartially. c. The Minister acknowledges that the Commission plays a meaningful role in the development of the policies and programs of the government, as well as in the delivery of those policies and programs. d. The Minister acknowledges that supervising the regulated sectors places a responsibility on the Commission to participate in inter-jurisdictional organizations of provincial, federal and territorial financial services organizations to the extent as may be permitted by its mandate. e. The Commission acknowledges that when policy development is contemplated by an interjurisdictional organization in which the Commission participates to the extent as may be permitted by its mandate, the Minister s Office and Ministry policy staff should be advised and consulted in a timely fashion prior to the initiation of the policy development and the development and execution of any material agreements and as the policy development progresses f. The Chair, the Superintendent and the Commission acknowledge that accountability is a fundamental principle to be observed in the management, administration and operations of the Agencies. The Chair, the Superintendent and the Commission acknowledge that they are accountable to the government through the Minister. The Commission acknowledges that accountability to the government means accountability to the Minister through the Chair and the Superintendent. The Tribunal acknowledges that accountability to the government means accountability to the Minister through the Chair. 6

g. As a provincial agency of the government, the Agencies conduct themselves according to the management principles of the government of Ontario. These principles include ethical behaviour, prudent, efficient and lawful use of public resources, fairness, high quality service to the public, and openness and transparency to the extent allowed under law. h. The Agencies and the Ministry agree to avoid duplication of services wherever possible. 6.1 Minister The Minister is accountable 6. Accountability Relationships a. to Cabinet and the Legislative Assembly for reporting and responding to the Legislative Assembly on the affairs of the Agencies. b. to the Cabinet for the performance of the Agencies and their compliance with the government s operational policies and broad policy directions. 6.2 Chair The Chair is accountable a. to the Minister for the performance of the Commission (jointly with the Superintendent) and of the Tribunal in fulfilling their respective mandates, b. for carrying out the roles and responsibilities assigned to the Chair by the Act, the related statutes and other applicable legislation, applicable TB/MBC and Ministry directives, and this MOU. 6.3 Superintendent The Superintendent is accountable a. to the Minister for the performance of the Commission (jointly with the Chair) and for carrying out the roles and responsibilities assigned to the Superintendent by the Act, the related statutes and other applicable legislation, applicable TB/MBC and Ministry directives, and this MOU. b. The Superintendent informs the Commission on the policies and operational decisions taken by the Superintendent under the Act and the related statutes as appropriate. c. The Agencies staff reports to and are accountable to the Superintendent for their performance. 6.4 Commission a. The Commission is accountable to the Minister through the Chair and the Superintendent for carrying out the roles and responsibilities assigned to it by the Act, the related statutes, applicable TB/MBC and Ministry directives, and this MOU. 7

6.5 Deputy Minister a. The Deputy Minister is accountable to the Secretary of Cabinet and the Minister for the performance of the Ministry in providing administrative and organizational support to the Agencies and for carrying out the roles and responsibilities assigned by the Minister, applicable TB/MBC and Ministry directives, and this MOU. 7. Conflict of Interest a. The Tribunal is a public body under the PSOA and has chosen to follow the conflict of interest rules established under the PSOA, which are set out in Ontario Regulation 381/07. b. Pursuant to Ontario Regulation 147/10 under the PSOA, the Chair is the Ethics Executive for appointees. The Chair is responsible for ensuring that appointees are informed of the ethical rules to which they are subject, including the rules on conflict of interest, political activity and protected disclosure of wrongdoing that apply to Tribunal appointees and for promoting ethical conduct by appointees. c. The Commission is a public body under the PSOA and has chosen to follow the conflict of interest rules established under the PSOA, which are set out in Ontario Regulation 381/07. d. Pursuant to Ontario Regulation 147/10 under the PSOA, the Superintendent (in his capacity as CEO of the Commission) has been prescribed as the Ethics Executive for the Agencies employees. The Superintendent is responsible for ensuring that the Agencies employees are informed of the ethical rules to which they are subject, including the rules on conflict of interest, political activity and protected disclosure of wrongdoing that apply to Commission staff, and for promoting ethical conduct by employees e. Pursuant to section 9(1) of the Act, the Commission has established conflict of interest guidelines with which the members of the Commission, appointees and employees shall comply. 8. Roles and Responsibilities 8.1 Minister The Minister is responsible to Cabinet and the Legislative Assembly for: a. Reporting and responding to the Legislative Assembly on the affairs of the Agencies b. Reporting and responding to the Cabinet and TB/MBC on the Agencies performance and compliance with applicable TB/MBC directives, the government s operational policies and broad policy directions c. Receiving the annual report from the Agencies, submitting the report to Cabinet and tabling it in the Legislative Assembly d. Receiving other reports from the Agencies and tabling them in the Legislative Assembly if and as required under the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, Registered Insurance Brokers Act, R.S.O. 1990, c. R.19 and the Act 8

e. When appropriate or necessary, taking action or directing that corrective action be taken in respect of the Agencies mandate or operations f. Informing the Chair and the Superintendent of the government s priorities and broad policy directions for the Agencies g. Consulting, as appropriate, with the Chair and the Superintendent (and others) on significant new directions or when the government is considering regulatory or legislative changes for the Agencies h. Meeting with the Chair annually, or as requested by either party, to discuss issues relating to the fulfillment of the Tribunal s mandate i. Recommending the Agencies MOU to MBC for approval before it is signed by the parties j. Reviewing the advice of the Chair on candidates to put forth for appointment or reappointment as vice chair or as members of the Tribunal k. Reviewing the advice of the Superintendent on candidates put forth for appointment or reappointment as the Director of Arbitrations until such time that amendments contained in Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 are proclaimed l. Reviewing and approving the Agencies annual business plan m. Reviewing the recommendations of the Commission on the fees to be set under the Act and related statutes and approving or setting fees. n. Recommending to Cabinet on the recommendation of the Commission if requested, the manner in which assessments are applied to the regulated sectors and entities that form part of a regulated sector o. Recommending to TB/MBC any provincial funding to be given to the Agencies 8.2 Chair and Superintendent The Chair and the Superintendent are responsible for: a. Ensuring timely communications with the Ministry and Minister regarding any issues or events that may concern, or can reasonably be expected to concern the Minister in the exercise of his/her responsibilities relating to the agency b. Consulting with the Ministry and Minister in advance regarding any activity which may have an impact on the government and ministry s policies, directives or procedures, or on the agency s mandate, powers or responsibilities as set out in the agency s constituting instrument c. Developing an MOU with the Ministry staff and Minister and signing it on behalf of the Agencies 9

d. Reviewing and approving the Agencies annual statement of proposed priorities, business plans, budget, annual report and financial statements, and submitting them to the Minister in accordance with the time lines specified in the applicable TB/MBC and Ministry directives, and this MOU e. Carrying out public communications and relations for the Commission f. Cooperating with any periodic review of the Agencies directed by the Minister or TB/MBC g. Consulting, as appropriate, with stakeholders on the Commission s enforcement and operational goals, objectives and strategic directions 8.3 Chair The Chair, as chair of the Tribunal, is responsible for: a. Providing leadership to the Tribunal b. Setting the goals, objectives, and strategic directions for the Tribunal within its mandate as defined by the Act and the related statutes c. Directing the affairs of the Tribunal so as to fulfill its mandate as defined by the Act and the related statutes d. Ensuring that the Tribunal has an appropriate risk management framework and mitigating strategy in place to help provide the proper level of assurance that program or service delivery objectives are met e. Ensuring that a system for the retention of formal Tribunal documents and making such documents publicly available, as appropriate, is in place f. Developing performance measures and targets for the Tribunal and monitoring the Tribunal s performance g. As the Ethics Executive, promoting ethical conduct and ensuring that appointees are informed of their responsibilities under the PSOA and the regulations and directives made under that Act, with regard to the rules of ethical conduct, including conflict of interest, political activity rules, post-service conduct and disclosure of wrongdoing h. Recording and making determinations about any declared or apparent conflicts of interest of appointees i. Making sure that an appropriate framework is in place for appointees to receive adequate orientation and training j. Making sure that appointees are aware of and comply with applicable TB/MBC and Ministry directives k. Keeping the Minister informed of upcoming appointment vacancies and providing recommendations for appointments or re-appointments 10

l. Ensuring that public funds are used by appointees with integrity and honesty m. Reviewing and approving claims for per diems and expenses of appointees n. Making sure a process for responding to and resolving complaints from the public and Tribunal clients is in place o. Directing corrective action on the functioning or operations of the Tribunal, if needed p. Consulting, as appropriate, with stakeholders on the Tribunal s goals, objectives and strategic directions q. Meeting with the Minister annually, or as requested by either party, to discuss issues relating to the fulfillment of the Tribunal s mandate 8.4 Superintendent The Superintendent is responsible for: a. Providing leadership and management to the Agencies employees, including financial resources management b. Ensuring that the Agencies operate within the approved budget allocation in fulfilling their respective mandates c. Managing the day-to-day operations of the Commission in accordance with TB/MBC and Ministry directives, accepted business and financial practices, and this MOU d. Seeking support and advice from the Ministry, as appropriate, on the Agencies management issues e. Consulting with the Deputy Minister, as needed, on matters of mutual importance, including services provided by the Ministry, and on TB/MBC and Ministry directives and policies f. Setting and applying policies to ensure that the Agencies use public funds prudently and with integrity and honesty g. Establishing and applying a financial management framework for the Agencies h. Establishing systems to ensure that the Agencies operate within the approved business plan i. Making sure that appropriate management systems are in place for information technology, financial and human resources for the effective administration of the Agencies j. Directing the development of an appropriate risk management framework and mitigating strategy for managing risks that the Commission may encounter in meeting its program or service delivery objectives k. Supporting the Commission in meeting its responsibilities l. Carrying out in-year monitoring of the Commission s operational performance and reporting on it to the Commission 11

m. Advising the Commission on compliance with TB/MBC and Ministry directives and policies and procedures n. Preparing the annual statement of proposed priorities, annual reports and business plans to be approved by the Commission prior to submission to the Minister o. Ensuring that an annual audited financial statement is prepared for public release and posting on the Commission s website after submission to the Minister and tabling in the Legislature p. Ensuring that a system is in place for the creation, collection, retention and disposal of Commission records and for making such documents publicly available, as appropriate q. Establishing performance measures and targets for the Commission and a performance review system for the Agencies employees and implementing the system r. As the Ethics Executive, promoting ethical conduct, and ensuring that the Agencies employees are informed of their responsibilities under the PSOA and the regulations and directives made under that Act, with regard to the rules of ethical conduct, including conflict of interest, political activity, post-service conduct and disclosure of wrongdoing s. Recording and making determinations about any declared or apparent conflicts of interest and disclosures of wrongdoing t. Making sure that an appropriate framework is in place for the Agencies employees to receive adequate orientation and training u. Making sure that the Agencies employees are aware of and comply with applicable TB/MBC and Ministry directives v. Providing recommendations to the Minister for appointment or re-appointment to the Director of Arbitrations until such time that amendments contained in Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 are proclaimed w. Arranging for audits, as needed x. Providing the Minister and Deputy Minister with a copy of every audit report and a copy of the Agencies response to each report and any recommendations in the report y. Advising the Minister annually, at a minimum, or at any time requested on any outstanding audit recommendations. z. Directing corrective action on the functioning or operations of the Commission, if needed aa. Consulting, as appropriate, with stakeholders on the Commission s goals, objectives and strategic directions bb. Participating in inter-jurisdictional organizations of provincial, federal and territorial financial service regulators to promote the effective supervision of the regulated sectors in Ontario 12

cc. Ensuring that the Deputy Minister and Ministry staff are advised and consulted beforehand in a timely fashion when the Commission is contemplating significant new directions for the Commission that may lead to recommendations for amendments to any legislation or regulations dd. Providing updates and other information to the Liaison Committee referred to in section 8.6(o) of this MOU regarding the Commission s regulatory actions and the overall health of the credit union system ee. Meeting with the Deputy Minister at least quarterly to discuss issues relating to the efficient operation of the Commission and the provision of services by the Ministry to the Agencies ff. Ensuring that the legal, financial and other interests of the government in intellectual property are protected in any contract that the agency may enter into with a third party that involves the creation of intellectual property. 8.5 Commission The Commission is responsible for: a. Ensuring the provision of regulatory services that protect the public interest and enhance public confidence in the regulated sectors b. Making recommendations to the Minister on matters affecting the regulated sectors c. Ensuring the provision of resources necessary for the proper functioning of the Tribunal d. On request, making recommendations to the Minister concerning the manner in which assessments are applied to the regulated sectors and entities that form part of a regulated sector e. Making proposals for the Minister s approval regarding the payment of fees in relation to any matter under the Act f. Approving the annual statement of proposed priorities, business plans, annual report, and other reports required by the Minister, in keeping with TB/MBC s requirements and the Act g. Establishing and applying conflict of interest guidelines that apply to the members of the Commission, appointees and employees h. Ensuring that policy statements issued by the Minister under section 12 of the Act receive consideration in the exercise of its responsibilities i. Approving the Agencies MOU in a timely manner and authorizing the Chair and the Superintendent to sign it on behalf of the Agencies 8.6 Deputy Minister The Deputy Minister is responsible for: a. Advising the Minister on the requirements of AAD and other directives that apply to the Agencies 13

b. Advising the Minister on the operation of the Agencies or their consolidation or elimination c. Establishing a framework for reviewing and assessing the Agencies business plans and other reports d. Advising the Minister on documents submitted by the Agencies to the Minister for review or approval, or both e. Advising and assisting the Minister on meeting assigned ministerial responsibilities with respect to the Agencies f. Undertaking reviews of the Agencies as directed by the Minister g. Cooperating with any review of the Agencies as directed by the Minister or TB/MBC h. Monitoring the Agencies on behalf of the Minister while respecting the Agencies authority and where warranted, identifying needs for corrective action and recommending to the Minister ways of resolving any contentious issues that might arise from time to time i. Ensuring that the Agencies have an appropriate risk management framework and mitigating strategy in place for managing risks that the Agencies may encounter in meeting their program or service delivery objectives j. Negotiating a draft MOU with the Chair and the Superintendent as directed by the Minister k. Consulting with the Superintendent, as needed, on matters of mutual importance, including services provided by the Ministry, and on TB/MBC directives and Ministry policies l. Meeting with the Chair as needed or as directed by the Minister m. Arranging for administrative, financial and other support to the Agencies as specified in this MOU n. Submitting a report to the secretaries of TB/MBC on the wind-down of the Agencies (immediately following the disposition of any assets), the completion of any outstanding responsibilities by the Agencies and the end of any appointments o. Establishing a Liaison Committee composed of employees from the Ministry, the Deposit Insurance Corporation of Ontario, and the Commission that will meet at least three times a year to provide updates and other information regarding their regulatory actions and the overall health of the credit union system p. Meeting with the Superintendent at least quarterly to discuss issues relating to the efficient operation of the Commission and the provision of services by the Ministry to the Agencies q. Informing the Chair and the Superintendent of new government directives, new Ministry policies and priorities that affect the Agencies and any exemptions to or exemptions in whole or in part from TB/MBC directives or Ministry administrative policies 9. Reporting Requirements 14

9.1 Business Plan a. The Chair and the Superintendent will ensure that the Minister is provided annually with the Agencies business plan covering a minimum of three years for approval within the timelines established by the Minister for this purpose. b. The Chair and the Superintendent are responsible for ensuring that the Agencies annual business plan fulfills the requirements set out in the AAD. c. The Minister will review the Agencies annual business plan and will promptly advise the Chair and the Superintendent whether or not he concurs with the directions proposed by the Commission. The Minister will advise the Chair and the Superintendent where and in what manner the plans vary from government or Ministry policy or priorities, and the Commission will revise its plan accordingly. d. The chair of TB/MBC may require the Minister to submit the Agencies business plan to TB/MBC for review at any time. 9.2 Annual Report a. The Chair and the Superintendent are responsible for ensuring that the Agencies annual report is submitted to the Minister, who is responsible for submitting the report to Cabinet and for tabling it in the Legislative Assembly. The Chair and the Superintendent will submit the annual report to the Minister by mid-november each year. 9.3 Annual Statement of Proposed Priorities a. The Chair and the Superintendent are responsible for ensuring that the Agencies annual statement of proposed priorities is delivered to the Minister in a timely manner for the Minister s prior review before it is published in The Ontario Gazette on or before June 30 every year. 9.4 Other Reports a. The Superintendent is responsible for ensuring that the reports and documents set out in Appendix B to this MOU are submitted to the Minister according to the timelines set out in the Appendix. b. At the request of the Minister or Deputy Minister, the Commission will supply specific data, and other information that may be required from time-to-time for the purpose of Ministry administration, issue management, policy development, or for any other purpose relating to the Ministry or the finances of the Province. 10. Communications The parties to this MOU recognize that the timely exchange of information on the operations and administration of the Agencies is essential for the Minister to meet his responsibilities for reporting and responding to the Legislative Assembly on the affairs of the Agencies. The parties also recognize that it is essential for the Chair and the Superintendent to be kept informed of the government initiatives and broad policy directions that may affect the Agencies mandates and functions. 15

The parties, therefore, agree as follows: a. Communications shall not include discussion or exchanging of information between the Agencies personnel and the Minister, Deputy Minister or Ministry staff about specific current, past, or future cases to be heard by the Superintendent or the Tribunal. b. Inquiries received by the Minister s office regarding a proceeding in progress before the Superintendent, the Tribunal or in the courts will be re-directed to the Commission without comment. Any response made by the Minister s office to the inquiring party will indicate that the inquiry has been forwarded to the Commission or the Tribunal as appropriate and that the Minister cannot interfere with a regulatory and / or adjudicative matter. c. The Chair and the Superintendent will keep the Ministry staff and Minister advised, in a timely manner, of all planned events and issues that concern or can be reasonably expected to concern the Minister in the exercise of the Minister s responsibilities. d. The Minister will consult with the Chair and the Superintendent, as appropriate, on broad government policy initiatives or legislation being considered by the government that may impact on the Agencies mandate or functions. e. The Minister and the Chair and the Superintendent will consult with each other on public communications strategies and publications. They will keep each other informed of the results of stakeholder and other public consultations and discussions in a timely manner. f. The Superintendent will maintain timely and effective communication with the Minister s Office and the Ministry, including providing notice of all publications, and drafts of such publications (as requested), within a reasonable time in advance of the publication date. g. The Agencies and Ministry will adhere to the Public Communications Protocol set out as Appendix C to this MOU. 11. Administrative Arrangements 11.1 Applicable TB/MBC and Ministry Directives a. The Chair is responsible for ensuring that the Tribunal operates in accordance with all applicable TB/MBC and Ministry directives, as well as applicable Ministry financial and administrative policies and procedures. b. The Superintendent is responsible for ensuring that the Commission operates in accordance with all applicable TB/MBC and Ministry directives, as well as applicable Ministry financial and administrative policies and procedures. c. Appendix D to this MOU sets out a list of applicable TB/MBC directives and policies as of the signing date of this MOU. 11.2 Administrative and Organizational Support Services a. The Deputy Minister is responsible for providing the Agencies with the administrative and organizational support services listed in Appendix E to this MOU, and for negotiating with Ontario Shared Services concerning these services. 16

b. Appendix E may be reviewed at any time at the request of either party. c. The Deputy Minister will ensure that the support or services provided to the Agencies are of the same quality as those provided to the Ministry s own divisions and branches. 11.3 Legal Services a. Legal services are to be provided in accordance with the Ministry of the Attorney General's (MAG) Corporate Operating Policy on Acquiring and Using Legal Services. This Policy provides that legal work done on behalf of the government by ministries and specified agencies must be performed by government legal counsel or, in certain specific cases, by private sector lawyers whose retentions have been approved by MAG. 11.4 Freedom of Information and Protection of Privacy a. The Minister is the institution head for the purposes of the Freedom of Information and Protection of Privacy Act (FIPPA), R.S.O. 1990, c. F.31, and exercises the duties of the head under FIPPA in respect of the Agencies, unless otherwise delegated. b. The Commission shall respond to and process access for information requests and privacy complaints and investigations and shall fulfill all requirements under FIPPA with support, consultation and timely communication from the Ministry FOI Coordinator and other Ministry delegates. 11.5 Delegation of Human Resources Management Authority Under the PSOA a. The Public Service Commission (PSC) can delegate HR authority in respect of Commission public bodies. Ontario Regulation 148/10 under the PSOA prescribes the persons in Commission public bodies to whom the PSC can delegate any of its powers, duties or functions. The Superintendent (in his capacity as CEO of the Commission) has been prescribed for the purposes of section 44(4)(a) of the PSOA in respect of Commission and Tribunal employees. b. The Superintendent is accountable for exercising the delegated human resources authority in compliance with any relevant legislation, directives or policies and in accordance with the mandate of the Agencies, and within the parameters of the delegated authority. c. The delegations made by the PSC and exercised by the Superintendent are set out in Appendix F to this MOU. 11.6 Records Management a. The Superintendent is responsible for ensuring that a system is in place for the creation, collection, maintenance and disposal of records. b. The Superintendent is responsible for ensuring that the Agencies comply with the Archives and Recordkeeping Act, 2006, S.O. 2006, c 34, Schedule A. 11.7 Client Service a. The Superintendent will ensure that the Agencies deliver their services at a quality standard that reflects the principles and requirements of the OPS Service Directive. 17

b. The Agencies have a formal process for responding to complaints about the quality of services received by clients of the Agencies consistent with the government's service quality standards c. The Agencies formal process for responding to complaints about the quality of services is separate and distinct from any statutory provisions about re-consideration, appeals, etc. of the adjudicative or regulatory decisions of the Superintendent or the Tribunal. d. The Agencies annual business plan will include performance measures and targets for client service and the Agencies response to complaints. 11.8 Information Technology (IT) a. The Agencies do not use the OPS IT infrastructure, telephony system or IT services. Since inception, the Agencies have owned and maintained a separate state-of-the-art technology infrastructure including systems. All funding for IT is provided through the Commission s budget. b. The Commission s IT Section serves as the key provider of information technology services to the Agencies. The IT Section is responsible for business solution/application development, network operations, strategic IT planning, email and Blackberry support, and internal support c. The IT Section is also responsible for the coordination, administration and support of all telephony services; IT business continuity and disaster planning; and IT-related staff training for the Agencies. d. The Agencies effectively govern technical architecture through internal review and corporate risk oversight, and by adhering to applicable OPS Project Management Frameworks and methodologies for IT projects and the Procurement Directive. A mature project planning and oversight process involving standing and steering committees is established for all projects. e. The Agencies have established internal Information & Information Technology Policies which align with the OPS IT directives and policies and reflect the Agencies governance structures. 12. Financial Arrangements 12.1 Funding a. The Agencies cost recover from the regulated sectors through fees and assessments. The Agencies are funded out of the Consolidated Revenue Fund pursuant to an appropriation authorized by the Legislature. The majority of the Agencies expenditures are funded by way of interim payments made under section 15 of the Financial Administration Act, R.S.O. 1990, c. F.12 (FAA). The Agencies also receive a voted allocation each year, in order to account for recoveries that are received after the end of the fiscal year. b. The Motor Vehicle Accident Claims Fund (MVACF), which is part of the Commission administratively, is accounted for separately and maintains distinct liabilities. Pursuant to the Motor Vehicle Accident Claims Act, the MVACF is financed through recoveries of claims and by a levy on all drivers licences in Ontario, and by payments out of the Consolidated Revenue Fund as may be directed by the Lieutenant Governor in Council. 18

c. The Superintendent will prepare estimates of the Agencies expenditures for inclusion in the Ministry s Program Review, Renewal and Transformation Plan. The Superintendent will deliver these estimates to the Minister in sufficient time to be analyzed and approved by the Minister. The estimates may, after appropriate consultation with the Superintendent, be altered as required. d. Financial procedures of the Agencies must be in accordance with TB/MBC and Ministry directives and guidelines and other applicable government direction. e. The Minister approves fees in accordance with the Act and related statutes. The Lieutenant Governor in Council may assess entities in the regulated sectors pursuant to section 25 of the Act with respect to all expenses and expenditures made by the Agencies and the Ministry in respect of the regulated sectors and shall take into account fees that the Crown has received from the entities that form part of a regulated sector. f. Fees, assessments and other revenues, except for the Pension Benefit Guarantee Fund (PBGF) assessments and except for MVACF revenues, shall be received on the account of the Consolidated Revenue Fund. g. The Superintendent will invest the assets of the PBGF in accordance with a statement of investment policies and goals, which he will file with the Minister. h. The Superintendent will maintain, in a manner consistent with generally accepted accounting principles, proper and complete financial records related to both the PBGF and MVACF. i. Under section 28 of the FAA, the Agencies shall not enter into any financial arrangement or commitment, guarantee, indemnity or similar transaction that may increase, directly or indirectly, the indebtedness or contingent liabilities of the government of Ontario without first seeking and receiving the written approval of the Minister. The Agencies acknowledge that whether any such financial arrangement or commitment, guarantee, indemnity or similar transaction may increase, directly or indirectly, the indebtedness or contingent liabilities of the government of Ontario is for the Minister s determination, j. When ordered to do so by the Minister, under section 16.4 of the FAA, the Commission shall pay into the Consolidated Revenue Fund any money that the Minister determines is surplus to its requirements. 12.2 Financial Reports a. The Superintendent will provide to the Minister audited annual financial statements for each of the Agencies, PBGF and MVACF, and will include them as part of the Agencies annual report. The statements will be provided in a format that is in accordance with the province s stated accounting policies issued by the Office of the Provincial Controller. b. The Commission will submit to the Ministry salary information for appointees of the Tribunal, according to the Public Sector Salary Disclosure Act. 12.3 Taxation Status: Harmonized Sales Tax (HST) a. The Agencies acknowledge that property and/or services ordered/purchased by the Agencies are purchased by the Agencies for the use of the Crown in Right of Ontario. 19

b. The Agencies are responsible for paying Harmonized Sales Tax, where applicable. 12.4 Acquisition of Goods, Consulting and Non-Consulting Services a. The Agencies are required to adhere to the TB/MBC Procurement Directive and the Procurement Directive on Advertising, Public and Media Relations, and Creative Communications Services. 13. Audit and Review Arrangements a. Pursuant to section 14 of the Act the Auditor General shall examine annually the accounts and financial transactions for the Agencies. The accounts and transactions of the MVACF and PBGF are examined under the direction of the Auditor General. b. The Agencies are subject to periodic review and value-for-money audit by the Auditor General of Ontario under the Auditor General Act, R.S.O. 1990, c. A.35 and by the Ontario Internal Audit Division. c. Regardless of any annual external audit, the Minister may direct that the Agencies be audited. d. Ontario Internal Audit Division, Treasury Board Secretariat will provide internal audit services to the Agencies at the Agencies expense. The Agencies annual audit plan will be subject to the approval of the Commission s Audit and Risk Committee. e. Ontario Internal Audit Division may also carry out an internal audit, if approved to do so, by the Ministry s Audit Committee or by the Corporate Audit Committee. f. The Superintendent will respond to questions from the Auditor General or other auditors with regard to audit findings, conclusions and recommendations. g. The Superintendent will promptly provide a copy of every report from the Auditor General to the Minister and the Deputy Minister. The Superintendent will also provide a copy of the Agencies response to the audit report and any recommendations therein. The Superintendent will advise the Minister annually, at minimum, on any outstanding audit recommendations. h. The Superintendent may request an external audit of the financial transactions or management controls of the Agencies at the Agencies expense. 14. Staffing and Appointments 14.1 Staffing a. The Agencies are staffed by persons employed under Part III of the PSOA. b. The Agencies, in dealings with persons employed under the PSOA, are subject to TB/MBC human resources directives, and PSC directives under the PSOA. c. Pursuant to Ontario Regulation 148/10 under the PSOA, the Public Service Commission (PSC) has delegated some of its powers, duties or functions to the Superintendent. The Superintendent (in his capacity as CEO of the Commission) has been prescribed for the purposes of section 44(4)(a) of the PSOA in respect of the Agencies employees. The delegations made by the PSC and exercised by the Superintendent are set out in Appendix F to this MOU. 20

d. The Agencies employees report to and are accountable to the Superintendent for their performance. 14.2 Appointments a. The Chair and vice-chairs are appointed by the Lieutenant Governor in Council pursuant to section 4(1) of the Act. b. The members of the Tribunal are appointed by the Lieutenant Governor in Council pursuant to section 6(3) of the Act. c. The Director of Arbitrations is appointed by the Lieutenant Governor in Council pursuant to section 6(1) of the Insurance Act. 15. Liability Protection and Insurance 15.1 Immunity a. Pursuant to section 10(1) of the Act, no action or other proceeding for damages shall be instituted against the Superintendent, the Director of Arbitrations, any appointee, employee or any person engaged by the Superintendent or the Tribunal for any act done in good faith in the execution or intended execution of the person s powers or duties or for any neglect or default in the execution, in good faith, of the person s powers or duties. 15.2 Insurance a. The Agencies are covered under the province s Protection Program to protect themselves against claims that might arise from anything done or omitted to be done by the Agencies or appointees, employees, or agents, and from anything done or omitted to be done where bodily or personal injury, death, or property damage, including loss of use thereof, is caused. 16. Effective Date and Duration and Periodic Review of this MOU 16.1 Effective date of MOU a. This MOU becomes effective on the date it is signed by the parties. b. This MOU will remain in effect unless it is replaced by a new MOU. c. When a new Minister or Chair or Superintendent takes office, the Minister, Chair and Superintendent must affirm by letter that the MOU will continue in force without a review, or alternatively they may agree to revise it. A copy of the letter of affirmation between the Minister, Chair and Superintendent must be provided to the Secretary, Management Board of Cabinet within six months of the new party or parties commencement. d. Without affecting the effective date of this MOU, the Minister or the Chair or the Superintendent may initiate a review of this MOU by written request to the other. e. A full review of this MOU will be conducted immediately in the event of a significant change to the Agencies mandates, powers or governance structure as a result of an amendment to the Act. The MOU must be reviewed and renewed, revised, or replaced, but will continue in effect until superseded by a new memorandum of understanding. 21

16.2 Periodic Reviews a. The Agencies may be subject to a periodic review at the discretion and direction of TB/MBC or the Minister. The review may cover such matters relating to the Agencies that are determined by TB/MBC or the Minister, and may include the mandate, powers, governance structure and / or operations of the Agencies. b. The Minister will consult the Chair and the Superintendent as appropriate during any such review c. The Chair, the Superintendent and Commission will cooperate in any review. 22

Signatures Original signed by Florence A. Holden Chair Financial Services Commission of Ontario Financial Services Tribunal 26/01/2016 Date Original signed by Brian Mills Chief Executive Officer & Superintendent of Financial Services Financial Services Commission of Ontario 28/01/2016 Date Original signed by the Honourable Charles Sousa 09/06/2016 Minister Date Ministry of Finance 23

APPENDIX A RELATED STATUTES Automobile Insurance Rates Stabilization Act, 2003, S.O. 2003, c.9 Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25 Co-operative Corporations Act, R.S.O. 1990, c. C.35 Corporations Act, R.S.O. 1990, c. C.38 Credit Unions and Caisses Populaires Act, 1994, S.O. 1994, c. 11 Insurance Act, R.S.O. 1990, c. I.8 Loan and Trust Corporations Act, R.S.O. 1990, c. L.25 Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O., 2006, c.29 Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41 Pension Benefits Act, R.S.O. 1990, c. P.8 Prepaid Hospital and Medical Services Act, R.S.O. 1990, c. P.21 Registered Insurance Brokers Act, R.S.O. 1990, c. R.19 24

APPENDIX B SUMMARY OF REPORTING REQUIREMENTS REPORT/DOCUMENT Audited Financial Statements Prepares NAMES OF RESPONSIBLE OFFICIALS Office of the Auditor General DUE DATE REQUIREMENT SPECIAL NOTES As determined by the Office of the Auditor General In accordance with section 14 of the Financial Services Commission of Ontario Act, 1997, the auditor general shall examine annually the accounts and financial transactions of the Commission. In accordance with the Agencies & Appointments Directive, the annual report will include audited financial statements. Financial information is ready for the auditor by July 1. The timing of the Auditor General s audit may affect the preparation of the Annual Report. PBGF Financial Statements Prepares Office of the Auditor General As determined by the Office of the Auditor General In accordance with section 14 of the Financial Services Commission of Ontario Act, 1997. Financial information is ready for the auditor by May 1. The timing of the Auditor General s audit may affect the preparation of the Annual Report. MVACF Financial Statements Prepares Office of the Auditor General As determined by the Office of the Auditor General In accordance with section 9 of the Auditor General Act. Financial information is ready for the auditor by May 1. The timing of the Auditor General s audit may affect the preparation of the Annual Report.